Social Security Legislative Bulletin

107-29
November 13, 2002

House Approves Senate-Amended Version of H.R. 4878, the "Improper Payments Reduction Act of 2002"

On November 12, 2002, the House, by voice vote, agreed to the Senate amendment to H.R. 4878, the "Improper Payments Reduction Act of 2002." This action clears the measure for the President. As agreed to by the House and Senate, H.R. 4878 contains the following provisions:

Estimates of Improper Payments and Reports on Actions to Reduce Them

Would require the head of each Federal agency to:

Annually review all programs and activities they administer and identify any that may be susceptible to significant improper payments.

Estimate the annual amount of improper payments and report those estimates to Congress before March 31 of the following year, with all agencies using the same method of reporting, as determined by the Office of Management and Budget (OMB).

Require the inclusion of these estimates in annual budget submissions for fiscal years after fiscal year 2003.

For estimates of improper payments that exceed $10,000,000 dollars annually, would require the head of the agency to provide with the estimate a report including:

A discussion of the causes of the improper payments identified, actions taken to correct those causes, and results of the actions taken to address those causes;

A statement of whether the agency has the information systems and other infrastructure necessary to reduce improper payments to minimal cost-effective levels;

A description of the resources it has requested in its budget submission to get the necessary information systems and infrastructure; and

A description of the steps that the agency has taken to ensure accountability by responsible agency managers for reducing improper payments.

The bill requires that these estimates be made with respect to the administration of programs, and improper payments under programs, in fiscal years after fiscal year 2002 and would require the inclusion of these estimates in annual budget submissions for fiscal years after fiscal year 2003.

Guidance by the Office of Management and Budget (OMB)

Would require OMB to issue guidance on implementation of this Act no later than 6 months after enactment.